Large Urology Group Practice Association
Accountable Care Organizations
November 6, 2010
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Basic Premise for ACOs
Facilitate medical care coordination among providers
Improve quality of care
Dr. Berwick – CMS Administrator
Triple A Objectives
• Better care for patients
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ACO Vision
A care delivery organization (not a financing mechanism)
Patient at center of activity
Memory about patients
Attends to hand off of patients from one part of health delivery system to another
Waste and inefficiency reduced
Investments where they count
Prevention and proactive
Reduce dependence on hospitals
Data-rich
• Track outcomes over time
• Transparency on costs
Better care at lower costs
Medicare Shared Savings Program and Medicare Accountable Care Organizations: Section 3022 of Affordable Care Act
Definition of “Accountable Care Organization”:
An organization of healthcare providers that agrees to be accountable for the quality, cost, and overall care of
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Organizations that may Become Medicare
ACOs
Physicians and other professionals in group practices
Physicians and other professionals in networks of practices
Partnerships or joint venture arrangements between hospitals and physicians/professionals
Hospitals employing physicians/professionals
CMS Regulations
Better define eligibility
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Basic Statutory Requirements for ACO
Participation
Formal legal structure to receive and distribute shared savings
Minimum of 5,000 assigned beneficiaries
Sufficient number of primary care professionals and sufficient information on professionals for beneficiary assignment and payments
Participation in program for at least three years
Leadership and management structure (including clinical and administrative systems)
Qualification for Shared Savings
Participating ACO must meet specified quality performance standards for each 12-month period
Eligibility to receive share of any savings
• Actual per capita expenditures must be sufficient percentage below specified benchmark
Benchmark
• Based on most recent three years of per beneficiary
expenditures for Part A and B services for Medicare fee-for-service beneficiaries assigned to ACO
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Assignment of Medicare Beneficiaries to
ACO
Assigned beneficiaries: Those beneficiaries for whom ACO providers provide bulk of primary care services
Assigned beneficiaries not limited to ACO and its
providers – Can seek services from other providers of choice
ACO Legal Issues
Federal fraud and abuse and physician self-referral laws
Antitrust laws
State fraud and abuse and self-referral laws
State corporate practice of medicine laws
State HMO/insurance/managed care contracting laws
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Civil Monetary Penalty Law (“CMPL”)
Anti-Kickback Statute (“AKS”)
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Physician Self Referral Law/Stark
ACO Problem Under CMPL, AKS and
Stark
No statutory or regulatory safe harbor or exception specific to ACOs
Existing safe harbors/exceptions
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Existing Regulatory Guidance
OIG Advisory Opinions on gainsharing
Favorable Factors Common to OIG Advisory
Opinions and Proposed Stark Exception
Current members of hospital’s medical staff
Participation by a group of at least five physicians
Payment by hospital to group of physicians on an aggregate basis
Payment by physician group to each physician on per capita basis
Objective measurements for changes in quality
Annual resetting of cost savings baselines
Independent reviewer/auditor to review program prior to commencement and annually
Cost sharing capped at 50% of cost savings
Duration of program
• No more than three years
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CMS October 5 Workshop on
Accountable Care Organizations
Federal Trade Commission (“FTC”)
• Antitrust
HHS Office of Inspector General (“OIG”)
• Civil Monetary Penalty Law and Anti-Kickback Statute
Centers for Medicare and Medicaid Services (“CMS”)
Panelists for CMP/AKS/Stark
Jeffrey Micklos, Esq. – Federation of American Hospitals
Jonathan Diesenhaus, Esq. – American Hospital Association
Tom Wilder, Esq. – Association of Health Insurance Plans
Marcie Zakheim, Esq. – National Association of Community Health Centers
Robert Saner, Esq. – Medical Group Management Association
Ivy Baer, Esq. –Association of American Medical Colleges
Chester Speed, Esq. – American Medical Group Association
Jan Towers, Ph.D., CRNP, American Academy of Nurse Practitioners
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OIG/CMS Overview
Section 3022 Waiver Authority
How Secretary should exercise waiver authority
Safeguards needed under waiver
OIG/CMS Questions to Panel
Waiver v. exception
Broad waiver v. case-by-case waiver
Types of monitoring: self v. government
Role of IT/EHR
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Antitrust
Price fixing
Division of markets (geographic and product)
Mergers which lessen competition
Monopolization and attempted monopolization
Price Fixing
Sherman Act Section 1 prohibits contracts,
combinations and conspiracies that unreasonably restrain trade
• Applies to:
− Independent, competing providers • Does not apply to:
− Physicians within the same group practice
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Price Fixing
Per se illegality vs. rule of reason
Rule of reason
Pro-Competitive Efficiencies
Improve quality
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Pro-Competitive Efficiencies
cont’d Financial integration
• Capital investment in necessary infrastructure • Financial risk
Clinical integration
• Clinical protocols addressing utilization and quality • Program to evaluate and modify practice patterns
Price Fixing
Independent competitors in arrangements with private payors
• Is ACO and its providers at “financial risk”?
• Has ACO achieved sufficient clinical integration? • Will a CMS-approved Medicare ACO be entitled to
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Mergers
Will development of ACOs trigger more consolidation of providers?
Is ACO dominant in its market?
Group Boycotts
Excluding access to ACO
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FTC Panel
Harold Miller, Center for Health Care Quality and Payment Reform
Dr. Lee Sacks, Advocate Physician Partners & Advocate Health Care
Dr. Dana Safran, BC/BS Massachusetts
Trudi Trysla, Fairview Health Services
Joseph Turgeon, CIGNA
Dr. Cecil B. Wilson, American Medical Association
Dr. William C. Williams, Covenant Health Partners/Covenant Health Care
Dr. Janet S. Wright, American College of Cardiology
Gloria Austin, Brown & Toland
Terry Carroll, Fairview Health Services
Dr. Lawrence Casalino, Weill Cornell Medical College
Mary Jo Condon, St. Louis Area Business Health Coalition
John Friend, Esq., TMC HealthCare
Dr. Robert Galvin, Equity Healthcare
Elizabeth Gilbertson, HEREIU Welfare Fund
Proposed Safe Harbor Under
Consideration
Newly formed joint venture must comply with all
statutory and regulatory requirements under Section 3022 of the Affordable Care Act
Must participate in Medicare-shared savings program
Procedures and policies must be same for Medicare patients and private pay patients
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ACO Scale
How large must ACO be for effectiveness?
Importance of scale
• To measure performance and achieve program objectives
• To spread costs of infrastructure, staff and other resources
• To spread risk effectively
ACO Exclusivity
Can non-exclusive ACO be effective?
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FTC Questions to Panel
How many years of performance outcomes and metrics should FTC review in determining whether quality of
care is improving?
What, if anything, should FTC do if prices are increasing during this interim period?
Given the existing safe harbors (FTC/Justice
Department 1996 Statements of Antitrust Enforcement Policy in Health Care), should there be a separate safe harbor specific to ACOs?
FTC Questions to Panel
cont’d Has there been much consolidation or announced consolidation since passage of Affordable Care Act?
Should any proposed safe harbor consider the
geographic area in which providers compete differently than currently assessed?
To what extent can exclusivity increase an ACO’s market power?
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How Will Specialists Participate in ACOs?
Hospital Driven Models
• Covenant Health Partners Lubbock, Texas
• Tucson Medical Center Tucson, Arizona
• Advocate Physician Partners and Advocate Healthcare Oak Brook, Illinois
Physician Group Driven Model
Open Questions
Will financial rewards be enough to justify the costs of becoming a certified ACO?
How can ACOs control costs and maintain quality
outcomes if they do not manage 100% of the patient’s medical services? (Freedom of assigned Medicare beneficiaries to go outside their assigned ACO)
What mechanism will CMS develop to assign beneficiaries to ACOs?
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Open Questions
cont’d How is CMS going to assess quality across different organizations with different patient populations?
How will CMS attribute savings (against ACOs own prior performance or against similar ACOs)?
Participation of medical and surgical specialists in ACOs?
